For decades Israelis avoided Tel Aviv's biblical forerunner. It was seen by many as an Arab den of crime and drugs. But now that bourgeois Israelis have discovered Jaffa's ancient charm, the traditionally Arab coastal neighborhood of Ajami grinds with building crews throwing up condominiums with expansive – and expensive – sea views.

Powered by a real estate boom, Jaffa is undergoing a wave of development as Tel Aviv invests millions of dollars to build a new seafront park, and tourism operators prepare to open several boutique hotels.

It's a familiar pattern of gentrification, except the building in Jaffa has aggravated the fault line of the Palestinian-Israeli conflict, stirring nationalism in a district known for its quiescence and in a city known as Israel's capital of urbanity.

"For 40 years, they didn't take care of us. Now that they want to make it nice, they want to put us out on the street, so rich people will come here," says Amina Agarbiyeh. "I've always been for coexistence. I've never felt discrimination. Now I feel it in my flesh."

Ms. Agarbiyeh has lived on Kedem Street's sea cliff since moving to Ajami as a young girl in the 1960s. In recent months, accused of illegal renovations, Agarbiyeh's family of four has become one of nearly 500 households to be served with eviction papers.

Activists, residents, and planners see the wave of expulsion notices as a part of a government plot to clear Ajami of poor Arabs renting on public land so it can be sold to developers to build housing for the middle and upper class, who are overwhelmingly Jewish.

"This is what I call economic [population] transfer," says Kamal Agarbiyeh, a chair of the Ajami neighborhood committee who is not related to Amina. "They're coming with guns loaded and saying get out or I'll shoot. Except they're loaded with dollars not bullets."

Back in February, both Kamal and Amina joined about 1,000 marchers to protest the evictions by chanting, "In blood, in fire, we will redeem you, Jaffa." It's a chant borrowed from their Palestinian brethren in the West Bank and Gaza. The march marked Jaffa's first commemoration of Land Day, a day of Arab protest against Israeli expropriation of property belonging to Palestinians remaining inside Israel's original borders.

"There were moments that I felt uncomfortable at the demonstration," says Metial Lehavi, a Tel Aviv city council member from the leftist Meretz Party who supports Jaffa's prospective evictees but objects to turning the struggle into one of Palestinian nationalism. "I don't think it's the way to enlist public opinion."

Ajami's Arab activists say they don't oppose living alongside the wealthy Jews. "We want Jews to be in Jaffa, but we don't want it at the expense of Arabs," says Ibrahim Abu Zindi, who works at Jaffa's Arab-Jewish community center.

South of the ramparts of old Jaffa, the warrens of Ajami descend haphazardly to a shelf overlooking the Mediterranean. With arched windows atop Greek columns, Jaffa's old world motif strikes an earthy contrast to modernist Tel Aviv. "It's conquest of the desert," says Varda Paz, a real estate broker who estimated that some properties in Jaffa have doubled in value in the past six years.

After Israel's independence, Jaffa was incorporated into Tel Aviv, which was officially renamed Tel Aviv-Jaffa. The original residents of Jaffa, however, fled during the 1948 Arab-Israeli war, becoming refugees. The government eventually nationalized neighborhoods like Ajami, and leased out the dwellings to Arab migrants.

Naama Mishal, of the nonprofit planning rights advocacy group Bimkom, says the government still has a responsibility to Jaffa residents. Development "is raising the value of the assets, and coming back as a boomerang to the Arab residents. It's bringing Jews and cleaning out Jaffa."